Last month we wrote a piece concerning AXA’s agreement to pay COVID-19 related business interruption claims by a group of restaurants in France after a court ruled that the restaurants’ revenue losses resulting from COVID-19 and related government orders were covered under its insurance policies. AXA reportedly has already agreed to pay over 200 COVID-19 related claims.
Another European insurer recently made headlines for similar reasons. Despite initially denying liability, Swiss insurance company, Helvetia Insurance, announced that most of its policyholders in the hospitality industry have accepted settlements following coverage disputes for COVID-19 related business interruption losses. The settlements reportedly included policyholders from Switzerland, Austria, and Germany.
The positive response from the European insurers appears to have influenced the insurance industry across the continent. For instance, in the U.K., the Financial Conduct Authority announced that it is taking certain insurers to court to seek clarity as to coverage for COVID-19 related losses. In Germany, the government and a group of insurers reached an agreement whereby the government will pay for 70% of business interruption losses for policyholders in the hospitality industry, and the insurers will pay for half of the business interruption losses not covered by the government.
The positive response in Europe is in stark contrast with the insurance industry’s preliminary positions in the United States. The headlines on this side of the hemisphere demonstrate certain insurers’ attempts to avoid liability for COVID-19 related losses, despite accepting billions in premiums from policyholders in exchange for broad coverage promises. Whether insurers in the United States will follow their European counterparts remains to be seen. Until then, United States policyholders will want to properly present their coverage claims for COVID-19 related losses to their insurers and preserve all rights to pursue such claims in court or through an alternative dispute resolution in the event that their insurers improperly deny coverage.